That equation – that “the core purpose” and “what it gets paid for” were assumed to be the same thing – raised my hackles. I responded in twotweets: “Since when is ‘the core purpose’ of something the same as ‘what it gets paid for’? Core mission of a university is to educate people. BUSINESS MODEL of a university is to certify for pay. Don’t confuse the two.”

The conversation that ensued was provocative and edifying, and probably best cited here in the form of the dialogue it was:

EO: Industries change.
AL: Often for the worse. Especially when something that was not previously regarded as an “industry” becomes so.
EO: Isn’t the reason for not calling education an “industry” ideological? Who charges money, renders services & isn’t an “industry”? The film industry has changed. So has publishing. They’ve disaggregated. Lower barriers* to entry. Is that “for the worse”?
AL: You’re right, it’s an industry now; that’s the problem. It once had a higher mission & it’d be nice to hold on to some of that.
EO: Industries can’t have higher missions? One cannot have a high purpose, provide a service, and be concerned with efficiency?
AL: One can, but it’s often forgotten – as when people like the #elifocus speaker assume what makes the money must be the mission.
EO: I was not that speaker. I don’t conflate “mission” and “revenue streams.” Isn’t assuming they’re antithetical also a mistake?
AL: Speaker conflated; I know you weren’t him. They don’t have to be antithetical,but very important to keep distinction in mind.
EO: The thing I have trouble understanding is the assumption that anything to do with money contaminates any other value.

It’s that last thought, about money and other values, that I found most interesting in the conversation and that I’m writing about here. I didn’t reply to it then, because it deserves a reply significantly longer than 140 characters, and one better thought out than a spur-of-the-moment tweet. So I am taking it up here and now.

Does money contaminate any other value? No. But it certainly seems to contaminate some of them. And among them, I submit, are the goals of the traditional university.

The pursuit of money is certainly quite compatible with much of what the university has become in this day and age: a centre for vocational training, in which young people pay vast sums of money in order to have the skills that will allow them to prosper as adults. This is a highly profitable activity, and will likely remain so for a while. Not only profitable, it is hugely beneficial to those young people when the skills that they learn are those, like engineering and medicine, that will allow them to pay back their debt swiftly and go on to live out their maturity in wealth and fortune. All of that matters greatly, and our society would be worse off without it. I don’t want to pretend otherwise.

But something is still missing from this picture. What about the values that a university was supposed to represent just a few short generations ago? What about appreciating one’s history and heritage? Becoming an informed, critical and thoughtful citizen of one’s state? Developing wonder at the nature of reality, the question of why there is something rather than nothing? Thinking about what is most meaningful and valuable in life?

Or, from the flip side of the coin, what about the values cultivated by the eager radicals of the previous generation? What about understanding the structures of power in society and the way they marginalize? Learning the ways in which the world’s organization is based on a history of colonization and imperial violence? Becoming empowered to articulate one’s experience of oppression?

It is these humanistic values – the values of the old and new humanities – that do not make a profit. They never did – private universities subsidized them through endowments, public universities through government funding – and they never will. In the 1960s and before, colleges and universities paid for the older values without hesitation even though they were unprofitable, because they understood that these things, the old goals of humanistic inquiry, were good in themselves irrespective of money.

But things have changed a lot and are changing more, most of it in my lifetime, and most of it having to do with money. The scholarship I received as an undergrad at McGill in the ’90s was quite modest, but it subsidized my entire tuition and fees. Under those conditions it made great sense to pursue four years’ worth of humanistic enquiry, or the related social-scientific enquiry that I in fact pursued.

Today, of course, North American tuitions are grotesque, in the tens of thousands. Colleges and universities charge those high tuitions because they can – because they realize that in the big-money fields like computer science and management, it is worth it for students to pay them. They have become an industry with a business model, and one that is highly profitable even when they are nominally nonprofits.

But in this environment, fewer and fewer people are willing to pay those crippling tuitions in order to explore and realize humanistic values, whether of the traditional or postmodern kinds. Nor should they! To enter massive student debt, the contemporary form of indentured servitude, is bad enough when it at least helps ensure a comfortable living in adulthood. It is even more destructive to indenture oneself for these things that are valuable for their own sake. This is why the outrageous spike in university prices is doubly harmful: it not only makes it difficult for young people to secure the means of their existence, it also deprives them of the questions and ideas and values that allow them to make sense of that existence in a deeper sense. But according to the business model, according to the universities’ pursuit of monetary value and profit, it is entirely appropriate. In an era where young people justifiably fear for their future livelihoods, the market can bear the tuition spikes, and so money-minded universities continue to do so.

Perhaps more damaging still, the logic of markets and money comes similarly to corrupt even governments – the very institutions that make markets and money possible, and have the capacity to tame their excesses. Increasingly, governments view their own activity as nothing more than the pursuit of money for their citizens (or worse, their taxpayers), and go themselves on the attack against the humanities. “If you want to take gender studies, that’s fine, go to private school,” North Carolina Governor Patrick McCrory said in a radio interview in January. “But I don’t want to subsidize that if it’s not going to get someone a job.” McCrory is far from atypical. Like university administrations, his job is to be a guardian of the values that don’t make a profit. But he doesn’t do it. Instead he pursues only money and values related to money, and everything unrelated to money suffers.

So to return to the original question from O’Neill’s tweet: why would we assume that money contaminates other values? Simple. Because in the context at issue – contemporary academia – that is exactly what the evidence shows.

* I originally quoted this tweet verbatim when it said “carries” to entry. O’Neill confirmed that he meant “barriers” and I have changed it accordingly.

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9 thoughts on “How money corrupts the university’s values”

Another, more general answer to the question of “What values does money contaminate?”: I don’t recall whether I’ve raised this point on your blog before, but accumulating evidence in psychology/neuroscience points towards the idea that financial transactions do, in general, corrupt and supersede other motivations. When you make a question about money, that becomes the sole lens through which people answer the question. If you try to create an incentive structure that rewards good behavior, people game the system; but you ask people to think of it as a moral question, they behave well. When a preschool adds a financial penalty to parents who pick their children up late, late-pickups increase, because now it is a financial transaction with a known cost, rather than an agreement or trust relationship.

When a school administrator comes in with the lens of profit, then profit maximization is what they will pursue. Some things are fundamentally financial questions, transactional relationships; but not everything need be, or should be. Money contaminates other values, more broadly than just in the context of academia.

Amod, your question touches on an old hobby horse of mine — the erroneous and dangerous assumption of conservatives that non-profit entities should operate like for profit businesses. Under this view, the “fix” for troubled public schools is private charter schools. For profit hospitals deliver the same service as non-profit hospitals. And university researchers deliver the same societal benefit using for profit models (for example, making development of patent licensing a profit center for universities).

The trouble with this view is that it is demonstrably false and destructive of the communities of scholars and teachers and doctors that advance pure science, that educate choildren and care for our sick and elderly.

Years ago, I read a wonderful book called The Gift by Lewis Hyde. Drawing on economic theories of “gift economies” he very persuasively makes the case that academia and arts generally are gift economies in which scholars and artists contribute ideas — not for monetary compensation — but for status in the community. Publication of a seminal article benefits the community as a whole and elevates the status of the author in the community.

It is because universities are gift economies that faculty meetings are notorious for petty bickering. Once you realize that each faculty member at the meeting is concerned with their relative status in the community, it becomes clear that small matters that seem to threaten that status (an off hand comment about the merits of someone’s published work or who is chosen to lead a project) become elevated in importance. In a monetary economy, these things wouldn’t matter — a participant would determine his relative worth based on his paycheck or his revenue generation and would be happy to have someone else take on administrative work or quibble about the abstract merit of his work.

In law, we have been moving from a culture based on status to a culture based on contract for the past several hundred years. It is not that long ago (200 years or so) that corporations were invented as limited liability vehicles and displaced partnerships as the chosen structure for business ventures. Partnerships (at least general partnerships) are structures where the individual stands behind the venture and owes fiduciary duties to other partners (the “punctilio of honor most sensitive” to quote one famous judge). Within the last ten years, my venerable 150 year old law firm shifted from a general partnership model to a limited partnership — the status of the professions, like academia, are also shifting to profit driven models. In the process, much is lost or deemphasized — including professional duties to the legal system and courts, duties to accept pro bono matters (for lawyers), or to treat indigent patients (for doctors). Even the role of lawyers as counselors may shift subtly as the goal of pleasing clients and maximizing profits conflicts with a judgment that a client may not be a good “ethical fit” with the firm.

These days, there are very few areas of the law where the concept of status (what one party owes to another as a result of the relationship and not by contract or statute) is paramount. Among these are duties among family members (child support and alimony flowing from these duties), very limited corporate fiduciary duties to shareholders, duties of trustees to beneficiaries, limited duties in landlord / tenant and environmental law, and tort liability for negligent injury to others.

It is time that we recognized areas where contract, for profit based approaches are problematic. This entails both convincing conservatives that for profit approaches are destructive of community and the free flow of information in society — and persuading liberals that non-profits should not be compared with for profit entities (i.e. no more complaints that school teachers are paid less than investment bankers).

This is a gorgeous analysis, Jim. I have never seen anyone make such an eloquent defence of the academic system of status and prestige. Which I suppose isn’t much praise, considering I’m not sure I’ve ever previously heard anyone defend it at all! But I am quite convinced by what you say. A system of status and prestige is one way of creating a system, an economy so to speak, that is not based on monetary exchange. The academic humanities can survive under such a system, but they cannot survive under the pressures of money.

Thank you, Jim and Amod, for this interesting discussion.
Everyone working in the Academia, I believe, has been reflecting about these issues, yet it is hard to imagine a way out. After all, one needs a purpose for what one is doing and money is an easy purpose, because it is shared by everyone and because it is “objective” (making money is something we “see”), whereas in the case of immaterial goods, one might disagree about their importance (should universities aim at “critical thinking” or at “forming loyal civil servants”? and so on). Jim’s point about prestige is illuminating, yet I wonder whether this can be made explicit (could we ask taxpayers to pay in order for me to feel great?).

Confessional institutions have an advantage here, since they have an external purpose agreed upon. Unfortunately (for the humanities), such an external purpose is often the propagation of one faith and not the advancement of research in the direction of “truth”.

Many four-year institutions spend substantially more per student on “support” and “services” than they do on instruction, which is no longer seems to be the primary mission of the University. I’m not sure if that’s directly related to money values you discuss, but it does seem that many non-profit institutions, especially large ones, such as hospitals and universities, end up becoming obsessed with self-aggrandizement, at the expense of their original function. This seems to me to a large driver of cost, and combined with the public abandonment of education funding over the last 30 years, we see every increasingly huge costs being passed on to students.

Lewis Hyde’s book “The Gift” is well worth reading. It is the kind of book that opens up a new way of seeing — and once that has happened you begin to see gift economies in many situations — and how money is the instrument that severs relationships between people (for good or ill). For example, you begin to understand how a parent’s act of charging a 21 year old child rent to live at home is a powerful step toward severing the family bond and freeing the child to be independent. And you understand why prohibitions on gifts to politicians is so important — because the gift creates a status bond that is very powerful and problematic.

That debate matters a lot, because while the value of an education can be very high, the value of a credential is strictly limited. If students are gaining real, valuable skills in school, then putting more students into college will increase the productive capacity of firms and the economy—a net gain for everyone. Credentials, meanwhile, are a zero-sum game. They don’t create value; they just reallocate it, in the same way that rising home values serve to ration slots in good public schools. If employers have mostly been using college degrees to weed out the inept and the unmotivated, then getting more people into college simply means more competition for a limited number of well-paying jobs. And in the current environment, that means a lot of people borrowing money for jobs they won’t get.

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